Gross ups holdings of 3-5 year Treasurys

Bill Gross is boosting his exposure to shorter-to-intermediate-dated Treasurys in what could be deemed a bet on the Fed tapering soon, but not hiking the Fed Funds rate for a long time. Treasury holdings at his Total Return Fund (ETF equivalent: BOND) have risen to 38% - the highest since the end of April - but the buying is focused on 3-5 paper, and Gross continues to be underweight the long end of the curve.

"Market expectations for rate increases are unlikely to be met," says Gross in his latest monthly report.